Singapore-based superapp Grab sees the firm to breakeven earlier than expectation after it recorded narrowed losses in 2022.
Grab said in a statement on Thursday that its revenue for the fourth quarter surged 310 percent year-over-year to $502 million, underpinned by the growth in its mobility and deliveries segments, a reduction in incentives and a change in business model for certain delivery offerings in one of its markets
Its 2022 revenue also soared 112 percent year-over-year to $1.43 billion.
Its adjusted loss before interest, taxes, depreciation, and amortization for the quarter, narrowed to $111 million from $305 million a year ago, as it continued to grow gross merchandise value (GMV) while improving profitability from lowered incentive spend.
“Our 2022 and fourth quarter results demonstrate our commitment to accelerating our path to profitability,” said Anthony Tan, Group Chief Executive Officer and Co-Founder of Grab.
“In the fourth quarter, we achieved revenue growth of 310 percent year-over-year, while improving our group and deliveries segment adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) margins and maintaining regional category leadership across our mobility and food deliveries businesses,
“We achieved these results by focusing on capturing the rebound in mobility demand, optimizing our costs, reducing our cost-to-serve and innovating on products and services that drive stickiness and engagement within our ecosystem,” he added.
“As we look ahead, we will remain laser-focused on driving sustainable growth, and improving the efficiency of our ecosystem,” he said.
The group’s total GMV grew 11 percent year on year in the fourth quarter, primarily due to the continued recovery in mobility and growth in financial services.
Full year GMV was $19.94 billion and grew 24 percent year on year, in line with its GMV growth guidance of 22 percent to 25 percent year on year.
“We are pleased to report a strong set of results, with full year revenues and second half 2022 adjusted EBITDA coming in well above our guidance ranges,” said Peter Oey, Chief Financial Officer of Grab.
“In the fourth quarter, we recorded strong year-over-year growth in mobility revenue of 78 percent, and in our deliveries segment, we focused on driving a more profitable and sustainable business, which resulted in deliveries segment adjusted EBITDA margins improving substantially on a year-over-year and quarter-over-quarter basis,
“This sets us up for a strong 2023 as we continue to focus on growing in a sustainable manner by driving cost efficiencies across our organization, and driving margin improvements whilst being prudent with our capital,” he added.
“We are accelerating our group breakeven outlook on an adjusted EBITDA basis to the fourth quarter of 2023, earlier than our prior expectations of the second half of 2024,” he said.
The group’s deliveries revenue grew to $268 million in the fourth quarter 2022 from $1 million in the same period in 2021, and by 349 percent year on year for the full year 2022.
The strong growth was primarily attributed to contributions from Jaya Grocer, a reduction in incentives as a percentage of GMV, coupled with the change in business model of certain deliveries offerings in one of its markets.
Deliveries segment adjusted EBITDA as a percentage of GMV expanded to 2 percent in the fourth quarter of 2022 from negative 3.5 percent in the same period in 2021 and after achieving breakeven in the prior quarter.
For full year 2022, deliveries segment adjusted EBITDA improved by 73 percent year on year.
Grab’s mobility revenues, on the other hand, grew strongly and rose 78 percent year on year in the fourth quarter 2022, and grew by 40 percent year on year in the full year.
The strong year on year growth in mobility was underpinned by the continued demand recovery amidst the reopening, which drove a normalization in local commutes and increase in airport rides, and our efforts to improve supply across the region.
For 2023, Grab expects its revenue to come in between $2.20 billion and $2.30 billion.
It also forecast its loss before interest, taxes, depreciation, and amortization to be at between $275 million and $325 million in 2023, smaller than its 2022 loss of $793 million.
Keyword: Grab to breakeven earlier than expectation after records narrowed losses